OPKO Health Reports 2020 First Quarter Business Highlights and Financial Results
May 06 2020 - 4:05PM
OPKO Health, Inc. (NASDAQ: OPK) reports business
highlights and financial results for the three months ended March
31, 2020.
Business Highlights
- BioReference Laboratories
launched COVID-19 testing nationwide: On March 13,
2020, BioReference Laboratories launched a Real-Time Reverse
Transcription Polymerase Chain Reaction assay with an approximate
24-72 hour turnaround time to promote earlier diagnosis of the
SARS-CoV-2 virus to aid in limiting the spread of infection. In
addition to its nationwide COVID-19 test offering, BioReference
announced testing partnerships with the New York State Department
of Health, New York City Health and Hospital Corporation, the State
of New Jersey, the State of Florida and the cities of Detroit and
Miami, among others. Additionally, Rite Aid Corporation selected
BioReference to provide COVID-19 laboratory testing to its drive-up
locations with the goal of flattening the curve through widely
accessible diagnostic testing. To date, BioReference has run
approximately 700,000 COVID-19 tests and currently has a COVID-19
testing capacity of 35,000 tests per day. As of April 27, 2020,
BioReference Laboratories started offering COVID-19 antibody
testing, a semi-quantitative immunoassay that measures SARS-CoV-2
specific IgG antibody levels, correlating with the patient’s immune
response after COVID-19 infection. Within the next two weeks,
BioReference expects to expand its capacity to be able to process
up to 400,000 tests per day.
- Somatrogon abstract to be
presented at Endocrine Society’s ENDO Online 2020:
On April 22, 2020, OPKO announced the data from its two abstracts
regarding the global Phase 3 pediatric trial evaluating somatrogon
dosed once weekly in pre-pubertal children with growth hormone
deficiency will be combined into a single presentation at ENDO
Online 2020, a virtual event being held June 8 through 22 featuring
on-demand and live programming. The results of the pivotal Phase 3
study will be delivered on June 8, 2020 at 11:00 a.m. Eastern time
by Dr. Cheri Deal, the Principal Investigator of the pediatric
study. The two abstracts entitled “Somatrogon Growth Hormone
in the Treatment of Pediatric Growth Hormone Deficiency:
Results of the Pivotal Phase 3” and “Interpretation of Insulin-like
Growth Factor (IGF-1) Levels Following Administration of Somatrogon
(a long-acting Growth Hormone-hGH-CTP)” will be published online in
the April-May supplemental issue of the Journal of Endocrine
Society.
- Somatrogon global
regulatory submissions: Somatrogon regulatory
submission in the U.S. is anticipated to occur in the second half
of 2020. In Europe, regulatory submission will follow
completion of the open-label study demonstrating benefit and
compliance with reduced treatment burden, which is expected to be
completed in the third quarter of 2020. The registration study in
Japan for pediatric growth hormone deficiency patients was
completed in early March and topline data is expected in mid-2020.
- RAYALDEE total
prescriptions reported by IQVIA increased 78% in the first quarter
of 2020 compared with the first quarter in 2019:
Total prescriptions for the three months ended March 31, 2020
increased to approximately 18,327, compared with approximately
10,307 during the comparable period of 2019.
- Interim results from two
ongoing RAYALDEE studies reported: On March 25,
2020, OPKO announced positive preliminary data from the ongoing
Phase 4 comparative trial, which suggest that RAYALDEE may be more
effective in raising serum total 25-hydroxyvitamin D to the level
required to effectively suppress elevated plasma intact parathyroid
hormone (iPTH) in stage 3 or 4 chronic kidney patients. Final
results are expected in the second half of 2020. In addition, OPKO
announced positive proof-of-concept data from the ongoing Phase 2
trial in patients with stage 5 chronic kidney disease demonstrating
RAYALDEE may be useful in treating secondary hyperparathyroidism in
dialysis patients. The Phase 2 trial in hemodialysis patients is on
track to complete enrollment in the third quarter of 2020 with full
topline data expected in the first quarter of 2021.
- Nearly 16,000 4Kscore®
tests performed during the first quarter of 2020: Novitas
Solutions issued its final Local Coverage Determination for
Medicare payments for the 4Kscore test with defined coverage
criteria, effective December 30, 2019. With Medicare
reimbursement in place, the Company began its salesforce expansion
for the 4Kscore during the first quarter of 2020; however, COVID-19
impacted utilization during the month of March.
Financial Results
- Consolidated revenues for the first
quarter of 2020 were $211.5 million compared with $222.5 million
for the comparable period of 2019. The net loss for the first
quarter of 2020 was $59.1 million, or $0.09 per share, compared
with a net loss of $80.8 million, or $0.14 per share, for the
comparable period of 2019.
- Diagnostics:
Revenue from services in the first quarter of 2020 was $170.8
million compared with $178.9 million for the comparable period in
2019. Although revenue from services was positively affected by
increased reimbursement amounts and improved operational
procedures, in the last two weeks of March 2020, the Company
experienced a decline in testing volumes net of COVID-19 testing
services due to the COVID-19 pandemic. Total costs and expenses
were $189.0 million in the first quarter of 2020 compared with
$212.5 million for the comparable period in 2019 with the reduction
primarily attributable to lower selling, general and administrative
expenses due to cost-reduction initiatives. In addition, the 2019
period included a $10.6 million legal accrual. As a result,
operating loss was $18.1 million in the first quarter of 2020
compared with $33.6 million in the first quarter of
2019.
- Pharmaceuticals:
Revenue from products in the first quarter of 2020 was $31.1
million compared with $25.3 million in the first quarter of 2019
with the increase primarily attributable to higher sales of
RAYALDEE of $9.9 million in the first quarter of 2020 compared with
$5.8 million in the prior year period. Revenue from licensing and
intellectual property was $9.6 million in the first quarter of 2020
compared to $18.3 million in the first quarter of 2019 with the
reduction primarily due to a decrease in the amortization of
payments received from Pfizer, OPKO’s commercial partner for its
long-acting human growth hormone product, Somatrogon. Total cost
and expenses were $54.8 million in the first quarter of 2020
compared with $73.0 million for the prior year period, with the
decline primarily attributable to lower research and development
expenses due to the completion of the pediatric Phase 3 study for
somatrogon. The operating loss was $14.1 million in the first
quarter of 2020 compared to $29.5 million in the first quarter of
2019.
- Cash and
equivalents: Cash, cash equivalents and marketable
securities were $34.5 million as of March 31, 2020. In
addition, the Company has an unutilized $100 million credit
facility which provides the company with access to incremental
capital on a non-dilutive basis. In April 2020, the Company
also accessed additional capital available under the CARES Act
which provided the company with approximately $30 million of
short-term liquidity through various provisions under the Act.
CONFERENCE CALL & WEBCAST
INFORMATION
OPKO’s senior management will provide a business
update and discuss results in greater detail in a conference call
and live audio webcast at 4:30 p.m. Eastern time today, May 6,
2020. The conference call dial-in and webcast information is as
follows:
DOMESTIC DIAL-IN: |
|
(877) 783-8475 |
INTERNATIONAL DIAL-IN: |
|
(614)
999-1827 |
PASSCODE: |
|
9095275 |
WEBCAST: |
|
OPKO 1Q20
Results Conference Call |
For those unable to participate in the live
conference call or webcast, a replay will be available beginning
approximately two hours after the close of the conference call. To
access the replay, dial 855-859-2056 or 404-537-3406. The replay
passcode is 9095275. The replay can be accessed for a period of
time on OPKO’s website at OPKO 1Q20 Results Conference
Call.
About OPKO Health
OPKO Health is a diversified healthcare company.
In diagnostics, its BioReference Laboratories is one of the
nation's largest full-service clinical laboratories; GeneDx is a
rapidly growing genetic testing business; the 4Kscore® test is
used to assess a patient’s individual risk for aggressive prostate
cancer following an elevated PSA and to help decide about next
steps such as prostate biopsy; Claros® 1 is a point-of-care
diagnostics platform with a total PSA test approved by the
FDA. In our pharmaceutical pipeline, RAYALDEE is our first
pharmaceutical product to be marketed. OPK88003, a
once-weekly oxyntomodulin for type 2 diabetes and obesity -
reported positive data from a Phase 2 clinical trial. It’s
among a new class of GLP-1/glucagon receptor dual agonists.
OPK88004, a SARM (selective androgen receptor modulator) is
currently being studied for various potential indications. The
Company’s most advanced product utilizing its CTP technology, a
once-weekly human growth hormone for injection, successfully met
its primary endpoint and key secondary endpoints in a Phase 3 study
and is partnered with Pfizer. OPKO also has research, development,
production and distribution facilities abroad.
Cautionary Statement Regarding Forward
Looking Statements
This press release contains "forward-looking
statements," as that term is defined under the Private Securities
Litigation Reform Act of 1995 (PSLRA), which statements may be
identified by words such as "expects," "plans," "projects," "will,"
"may," "anticipates," "believes," "should," "intends," "estimates,"
and other words of similar meaning, including statements regarding
expected financial performance and expectations regarding the
market for and sales of our products, expectations about COVID-19
testing, our capacity for testing and expected turnaround time, our
ability to expand our capacity to be able to process up to 400,000
antibody tests per day, our product development efforts and the
expected benefits of our products, whether our products in
development will be commercialized, the possibility of unfavorable
new clinical data and further analyses of existing clinical data,
the risk that clinical trial data are subject to differing
interpretations and assessments by regulatory authorities, whether
regulatory authorities will be satisfied with the design of and
results from our clinical studies, whether the two Rayaldee studies
or our other ongoing and future clinical trials will be
successfully enrolled or completed on a timely basis or at all and
whether the data from any of our trials will support submission or
approval, validation and/or reimbursement for our products, whether
RAYALDEE prescriptions will continue to increase, expectations
regarding timing for commencing and concluding our clinical trials
and releasing data, the timing of our regulatory submissions,
including for somatrogon, our ability to market and sell any of our
products in development, and expectations about developing RAYALDEE
for dialysis patients, as well as other non-historical statements
about our expectations, beliefs or intentions regarding our
business, technologies and products, financial condition,
strategies or prospects. Many factors could cause our actual
activities or results to differ materially from the activities and
results anticipated in forward-looking statements. These factors
include those described in our Annual Reports on Form 10-K filed
and to be filed with the Securities and Exchange Commission and
under the heading “Risk Factors” in our other filings with the
Securities and Exchange Commission, as well as the ongoing effects
of the COVID-19 pandemic, the continuation and success of our
relationship with Pfizer and our other partners, liquidity issues
and the risks inherent in funding, developing and obtaining
regulatory approvals of new, commercially-viable and competitive
products and treatments, that earlier clinical results of
effectiveness and safety may not be reproducible or indicative of
future results, that somatrogon, the 4Kscore, RAYALDEE, and/or any
of our compounds or diagnostic products under development may fail,
may not achieve the expected results or effectiveness and may not
generate data that would support the approval or marketing of
products for the indications being studied or for other
indications, that currently available over-the-counter and
prescription products, as well as products under development by
others, may prove to be as or more effective than our products for
the indications being studied. In addition, forward-looking
statements may also be adversely affected by general market
factors, competitive product development, product availability,
federal and state regulations and legislation, the regulatory
process for new products and indications, manufacturing issues that
may arise, patent positions and litigation, among other factors.
The forward-looking statements contained in this press release
speak only as of the date the statements were made, and we do not
undertake any obligation to update forward-looking statements. We
intend that all forward-looking statements be subject to the
safe-harbor provisions of the PSLRA.
Contacts:
LHA Investor RelationsYvonne
Briggs, 310-691-7100ybriggs@lhai.comorBruce Voss, 310-691-7100
bvoss@lhai.com
—Tables to Follow—
OPKO Health, Inc. and SubsidiariesCondensed
Consolidated Balance Sheets (Unaudited)(in millions)
|
As of |
|
March 31, 2020 |
|
December 31, 2019 |
Assets: |
|
|
|
|
|
|
|
Cash, cash equivalents
and marketable securities |
$ |
34.5 |
|
|
$ |
85.5 |
|
Other current
assets |
|
239.9 |
|
|
|
238.5 |
|
Total Current Assets |
|
274.4 |
|
|
|
324.0 |
|
In-process Research and
Development and Goodwill |
|
1,259.8 |
|
|
|
1,262.1 |
|
Other assets |
|
698.3 |
|
|
|
723.2 |
|
Total Assets |
$ |
2,232.5 |
|
|
$ |
2,309.3 |
|
|
|
|
|
|
|
|
|
Liabilities and Equity: |
|
|
|
|
|
|
|
Current
liabilities |
$ |
245.1 |
|
|
$ |
249.1 |
|
Convertible Notes |
|
213.8 |
|
|
|
211.2 |
|
Deferred tax
liabilities, net |
|
118.6 |
|
|
|
118.7 |
|
Other long-term
liabilities, principally contract liabilities, contingent
consideration and lines of credit |
|
106.4 |
|
|
|
115.5 |
|
Total Liabilities |
|
683.9 |
|
|
|
694.5 |
|
Equity |
|
1,548.6 |
|
|
|
1,614.8 |
|
Total Liabilities and Equity |
$ |
2,232.5 |
|
|
$ |
2,309.3 |
|
|
|
OPKO Health, Inc. and SubsidiariesCondensed
Consolidated Statements of Operations (Unaudited)(in millions,
except share and per share data)
|
For the three months endedMarch 31, |
|
2020 |
|
2019 |
Revenues |
|
Revenue from services |
|
$ |
170.8 |
|
|
$ |
178.9 |
|
Revenue from products |
|
|
31.1 |
|
|
|
25.3 |
|
Revenue from transfer of intellectual property |
|
|
9.6 |
|
|
|
18.3 |
|
Total revenues |
|
|
211.5 |
|
|
|
222.5 |
|
Costs and expenses |
|
|
|
|
|
|
|
Cost of revenues |
|
|
140.3 |
|
|
|
144.0 |
|
Selling, general and administrative |
|
|
76.1 |
|
|
|
95.2 |
|
Research and development |
|
|
21.8 |
|
|
|
36.5 |
|
Contingent consideration |
|
|
(0.9 |
) |
|
|
4.8 |
|
Amortization of intangible assets |
|
|
14.9 |
|
|
|
16.6 |
|
Asset impairment charges |
|
|
0.0 |
|
|
|
0.7 |
|
Total Costs and expenses |
|
|
252.2 |
|
|
|
297.8 |
|
Operating loss |
|
|
(40.7 |
) |
|
|
(75.3 |
) |
Other income and (expense),
net |
|
|
(17.1 |
) |
|
|
(2.8 |
) |
Loss before income taxes and
investment losses |
|
|
(57.8 |
) |
|
|
(78.1 |
) |
Income tax provision |
|
|
(1.2 |
) |
|
|
(0.8 |
) |
Loss before investment
losses |
|
|
(59.0 |
) |
|
|
(78.9 |
) |
Loss from investments in
investees |
|
|
(0.1 |
) |
|
|
(1.9 |
) |
Net loss |
|
$ |
(59.1 |
) |
|
$ |
(80.8 |
) |
Loss per share, basic and diluted |
|
$ |
(0.09 |
) |
|
$ |
(0.14 |
) |
Weighted average common shares
outstanding, basic and diluted |
|
|
640,578,794 |
|
|
|
586,344,207 |
|
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